Anytime Fitness LLC, a leading franchiser of neighborhood fitness clubs, said this week that a master franchise agreement has been signed with the marketing division of Doha, Qatar-based Almuftah Group to open its first three fitness clubs there by July.

Anytime Fitness to flex its muscles in the Middle East

The Anytime Fitness club, at 150th Street in Apple Valley, is sporting the newest building design in the chain. Anytime Fitness plans to open three clubs in Qatar. (Staff photo: Bill Klotz.)

Anytime Fitness LLC, a leading franchiser of neighborhood fitness clubs, soon will pump up its presence in an unusual location.

Anytime said this week that a master franchise agreement has been signed with the marketing division of Doha, Qatar-based Almuftah Group to open its first three fitness clubs there by July. Qatar, a small, wealthy peninsular state in the Persian Gulf, is home to about 1.7 million people.

“The Almuftah Group is very well established and is doing a lot of American-based franchising,” said Mark Daly, national media director at Anytime Fitness. The Almuftah Group is a private company whose other business ventures include consumer retail products, auto sales, manufacturing, and franchising of Burger King, Arby’s and other fast-food restaurant chains.

“We trust their (Almuftah Group’s) judgment and experience,” Daly said Tuesday. “They will make the decision on where to expand (in the Middle East). Qatar is extremely stable. We are not concerned about opening clubs in Qatar. This is a very attractive market.”

Founded just 10 years ago, Anytime Fitness now has 1,500 clubs worldwide, including 1,400 U.S. locations. In Minnesota, the company has 120 clubs, including about 80 in the Twin Cities metro area. Anytime expects to add a few locations in outstate Minnesota.

“We had a great 2010,” opening about 300 new franchise locations, Daly said. “We expect to continue to open new clubs at the rate of nearly one a day, with Europe being one of our primary focuses for international expansion in 2011.”

Anytime Fitness also has clubs in New Zealand, Australia, India, Japan and England. It plans to enter Poland and the Netherlands this year, Daly said.

Retail observers said Anytime Fitness’ booming business has come from carving out a niche in the $20 billion-a-year U.S. health fitness industry, operating affordable, neighborhood clubs, which are usually 2,500 to 4,000 square feet in size.

Despite the sluggish U.S. economy, Anytime Fitness said the industry is doing well. A company statement says, “Nearly a million people join health clubs each year, pushing membership to 41.3 million people nationwide.” Anytime expects that number to grow because of corporate wellness programs and health insurance incentives.

“We don’t see our growth rate slowing down anytime soon,” Daly said. The average number of members at Anytime Fitness clubs open at least one year has increased from about 625 members per club in January 2006 to 725 per club in January 2011, he said.

The health fitness sector has plenty of players in the Twin Cities, including Bally’s Total Fitness, LA Fitness, LifeTime Fitness, Planet Fitness and the YMCA.

Anytime’s most direct competitor is Chanhassen-based Snap Fitness, which has about 2,200 locations around the world, including about 110 in Minnesota. The company, in recent news releases, said it is adding about 20 to 30 clubs a month. Its clubs have space and features similar to Anytime Fitness’.

Anytime Fitness gyms are usually located in small shopping malls or strip centers. Daly said most members live within three to five miles of their clubs, whose features include 24/7 availability to members, and integrated security and tracking systems to protect them.

Unlike bigger chains such as LifeTime Fitness, whose centers are 110,000 to 115,000 square feet, Anytime Fitness is able to squeeze into small neighborhoods because of its smaller footprint and significantly lower startup costs, said Dave Brennan, co-director of the Institute for Retailing Excellence at the University of St. Thomas in St. Paul.

For example, LifeTime Fitness can spend up to $15 million, including outdoor amenities, to put up a new club, while the startup costs for an Anytime Fitness location are in the $200,000 range.

Brennan said Qatar appears to be a good entry point into the Middle East for Anytime Fitness, noting that the state is one of the wealthiest in the world with a per capita income of nearly $150,000 per person. “It seems like Qatar could be ripe for something like this (Anytime Fitness),” he said.

Despite political unrest in some parts of the Middle East, Qatar appears quite stable, Brennan said. The fact that Anytime Fitness will have a local Qatar company handling the franchise expansion there is a big plus, he added.

“That reduces the risk quite significantly,” Brennan said.

Anytime Fitness LLC

Founded: 2002

Headquarters: Hastings, Minn.

Business: Operator of 24/7 neighborhood fitness clubs

Locations: 1,500

Typical square footage: 2,500 to 4,000

Members: 1 million

Employees: 100 in corporate operations

2010 revenue: $21.4 million

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Good to see the smaller fitness franchises expanding into different markets. The more low-key and intimate environment of the smaller chains provides a unique experience. Some people just need the basics to get their workout done quickly, not all the frills or unnecessary amenities.